VW emissions scandal: South Korea issues arrest warrant against company executive

The warrant is the first to be levelled against a Volkswagen executive after the scandal came to light

A South Korean court on Friday issued the first warrant for the arrest of a Volkswagen AG executive in connection with its cheating of vehicle emissions tests, in another blow to the German automaker's efforts to move on from the scandal.

The warrant is the first to be levelled against a Volkswagen executive anywhere in the world after the firm in September admitted to using software to falsify pollution tests on some diesel cars, spurring legal action in the United States, Germany, South Korea and elsewhere.

"This is just the beginning of the investigation," an official at the prosecution office said, declining to be named because the investigation was ongoing.

The Volkswagen Korea executive, identified by his last name Yun, faced five accusations including fabrication of documents and violation of the Air Quality Preservation Law, Seoul Central District Court spokesman Shin Jae-hwan said.

"The court acknowledges the reason and the necessity of the arrest," he told Reuters, declining to give further details or name the executive.

A Volkswagen Korea spokeswoman declined to comment.

South Korea has taken a particularly hard line against the automaker, filing a criminal complaint against two other executives, fining it 14.1 billion won ($11.97 million) and ordering it to recall 125,522 vehicles.

About 4,400 Korean consumers also have filed a class action lawsuit against Volkswagen and sister marque Audi demanding compensation over the false emissions claims.

Sources in the United States on Thursday said Volkswagen would pay more than $10 billion to settle claims by nearly 500,000 owners and fund efforts to offset pollution.

The South Korean arrest warrant comes after German prosecutors on Monday said they were investigating former Volkswagen CEO Martin Winterkorn and another executive over whether they effectively manipulated markets by delaying the release of information about the test cheating.

South Korean prosecutors would cooperate with their counterparts in Germany and the United States, the official said in Seoul.

The scandal has triggered a slide in Volkswagen's share of Asia's No.2 diesel car market, where it competes with dominant domestic players Hyundai Motor and Kia Motors.

Volkswagen said in April it would set aside 16.2 billion euros ($18.2 billion) and slash its dividend to cover the costs from the scandal.